Degussa sees '06 energy costs up 20% to Euro680m

08 November 2005 13:21  [Source: ICIS news]

DUSSELDORF, Germany (ICIS news)--German speciality chemicals company Degussa expects rising gas and electricity costs to boost its energy bill next year by about 20% to Euro670m-680m ($790m-803m), company executives said on Tuesday.

Board member Heinz-Joachim Wagner said the forecast Euro130m increase in energy prices would build on the 12% rise to Euro550m that Degussa had experienced in 2005.

Wagner was unable to forecast increases for feedstocks such as C4 crack, methanol, carbon black and acetone, but said they had risen by double-digit figures this year. Last year, Degussa's raw material index rose by just under 20%.

Chairman Utz-Helmuth Felcht said Degussa had tried to absorb this year's increases through cost management and greater efficiency but was forced to implement across-the-board product price hikes this autumn. Felcht said Degussa had been largely successful in passing on the increases it announced for the third quarter.

He was speaking after Degussa had unveiled a 10% rise in third quarter operating profits to Euro286m ($337.9m) on the back of higher product prices and volumes as well as gains from recent restructuring. 

Sales prices were up 3% on average and raw material price rises slowed in the third quarter to around 2%, said Felcht. These factors helped to make Q3 successful in terms of sales revenues and earnings, he said.

By: Jane Gibson
+44 20 8652 3214

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